Prospective airlines may crash fares on domestic routes

Fares on the domestic route may crash soon. New airlines are planning to enter to enter the market. These airlines are grappling to scale the hurdles of the Nigeria Civil Aviation Authority (NCAA) in securing the Air Operators’ Certificate (AOC), a major requirement for airlines.

According to a source, NCAA has been inundated with requests from many operators and investors interested in coming into the industry.

Investigations revealed that the NCAA may soon grant approval to at least 10 airlines.

It was learnt that some operators are concerned that should the NCAA open the floodgate for more players in the sector, air fares may likely drop, as the new entrants are said to be working hard to secure the environment-friendly aircraft that would be economical to operate.

Since the NCAA certified Dana Air to return for operations, with the issuance of its new air operators’ certificate in line with the revised Nigeria Civil Aviation Regulations (NCAR), fares on the domestic route have fallen.

The reduction in air fares on major trunk routes, including, Lagos -Abuja, Lagos-Port Harcourt, which operators describe as the golden triangle, have led to serious competition, among airlines, with flexible booking offers.

Apart from Dana Air’s return, the addition of Medview Airlines as well as the return of Chanchangi Airlines have led to reduced fares on the Lagos-Abuja routes, where some carriers had near monopoly status.

Investigations by The Nation revealed that online booking for airlines has offers a range of fares between N14,000 and N20,000 on the Lagos – Abuja routes in the following airlines, Medview, Dana Air, Aero and IRS Airlines last week, as opposed to the over N25,000 and N30,000, some carriers were offering last year.

Observers claimed that the higher fare regime last year was predicated on the limited number of airlines in operations at the time.

Investigations also revealed that evening fares were relatively lower than early morning fares on the Lagos-Abuja route.

A source hinted that the probable return of First Nation Airways, Associated Aviation, and Air Nigeria, may lead to more competition among players, with fare reduction, as the selling point of the airlines.

It was learnt that some domestic airlines are concluding business discussions with Brazilian aircraft manufacturer – Embraer, to acquire regional jets, which are fuel efficient and environment friendly to reduce operating costs.

The decision to acquire Embraer jets, it was learnt, comes on the heels of plans by the manufacturer to set up a maintenance facility in Nigeria, which will reduce the cost of aircraft maintenance, to enable the airlines to charge lower fares and operate efficiently.

Airlines that are working in this direction, it was gathered, include Associated Aviation, which is set to return soon with lower air fares.

The NCAA, it was learnt, is excited over the plan.

An industry expert, who pleaded not to be named, has urged the minister of aviation to distribute the 30 aircraft to be facilitated by government to domestic airlines that are seeking revaluation of their AOC, from the NCAA, insisting that such option is more feasible than setting up a national carrier.

The expert hinted that giving such aircraft to smaller airlines that operate into secondary airports, as feeder carriers will assist to checkmate the dominance to the big players, thereby bringing about reduction in airfares.

He affirmed that giving the aircraft to such carriers after due diligence on their managers based on industry knowledge and business plan, will achieve more result than starting afresh a national carrier, which survival remains uncertain.